Latest news with #WorkforcePell
Forbes
6 days ago
- Business
- Forbes
Why A New College Loan Rule Can't Show The Real Value Of Your Degree
A little-known provision in President Trump's recently signed One Big Beautiful Bill Act could reshape who gets to borrow for college — and which degrees survive. While headlines focus on $10.5 billion to shore up Pell Grants and a new Workforce Pell program, the law quietly bars federal loans for programs whose graduates don't meet minimum earnings thresholds. The bill, signed into law on July 3, prohibits college students from accessing federal student loans for enrolling in undergraduate, graduate, and graduate certificate programs that do not meet an earnings threshold. To qualify for loans, undergraduate programs must show that their graduates' median earnings exceed those of working adults aged 24-35 in the state with a high school diploma. Likewise, graduate degree and certificate programs must demonstrate that their graduates' median earnings are higher than those of bachelor's degree holders in the same state. Although it may seem like a small detail, the new accountability rule impacts almost every higher education institution, including for-profit schools. Nearly 6,000 institutions provide federal loans, and each year, 30% to 40% of undergraduates borrow from the federal government. This involves about 7 million students. Splitting credentials into those with perceived economic value and those without oversimplifies a more complex issue: many factors influence students' choices of college majors. There are advantages and disadvantages to consider. Potential Benefits On one hand, students should understand that some degrees may not provide a good return on investment. Traditionally, many have believed that attending college is essential to the American Dream, and that any degree will do. However, employment and labor market data show this isn't always the case. The new accountability requirements may act as a behavioral nudge that encourages students to avoid programs that don't meet their earning expectations. This could be good for students who might unwittingly enroll in a program without understanding the labor market implications of their choice. At the very least, the new earnings requirements hold colleges accountable for their claims about students' economic prospects after they graduate with degrees in hand. Potential Downsides However, there are disadvantages to simplifying complex earning differences into a binary distinction. Doing so masks key factors influencing earnings in various markets that students and their families need to understand to improve their chances of a positive return on investment. Five Factors Beyond the Threshold While the new requirement could help some students avoid programs with poor returns, it also reduces the value of a degree to a single number—median earnings. But the economic value of a degree depends on much more than a threshold. Here are five factors that can dramatically influence a graduate's earnings. There is a huge variation in earnings by major. Entry-level college graduates with Science, Technology, Mathematics, and Engineering majors, such as computer science and engineering, generally lead to higher salaries — often higher than $75,000 a year — while humanities and liberal arts degrees like English and psychology fall more in the $40,000-$50,000 range, according to Indeed. The difference between the lowest- and highest-paying majors— early childhood and petroleum engineering — is $3.4 million over a lifetime, according to an analysis by the Center for Education and the Workforce at Georgetown University. Earnings also vary by industry. People who start in finance or technology generally make more than those in education or social services. The same degree can lead to different wages depending on the industry. For example, a computer systems analyst in the aerospace industry earns a median yearly salary of $133,510, while the same role at a university earns $93,310, according to the Bureau of Labor Statistics. Graduates attending our nation's most selective colleges tend to earn more. Ivy League schools provide a higher return on investment than less selective colleges over 10 years, according to CEW. However, selective schools also have both high- and low-paying majors. A graduate with a STEM degree from a regional college might earn more than a graduate with a liberal arts degree from a selective school. Some of the earnings differences are probably due to graduates from selective schools coming from high-income backgrounds. Still, students from low-income backgrounds who attend selective colleges are more likely to become high earners. Earnings from a degree can vary based on who you are. Black and Latine graduates tend to earn less than their white and Asian peers, even with the same degree, same GPA, and institutions with the same selectivity, according to the CEW. Women earn less than men in nearly every major. Graduates from high-income families earn more than their low-income peers, even with the same major. This could be associated with differences in access to social and professional networks. The geographic location where college graduates work can influence earnings. Those who work in major metropolitan areas and on the coasts typically earn more than those who work in rural areas to offset the cost of living. For example, starting salaries for engineering graduates in the mid-Atlantic region are estimated at around $80,000-$82,000, but that drops to $70,000-$74,000 for those starting in the Plains, according to an analysis by Bankrate. Choosing what to study in college is one of the biggest investments you'll ever make. To improve your chances of a strong return, you need to look beyond an earnings threshold. Consider how your major performs across industries, how selective your school is, the quality of its internships and networks, and what alumni — especially those who share your racial background and gender — are earning. The better you understand these factors before you commit, the more likely you are to graduate with a degree that truly pays off.
Forbes
06-08-2025
- Politics
- Forbes
Workforce Pell Expands Access To Education, Training, And Opportunity
'We just expanded the definition of college,' writes Kathleen deLaski, capturing the spirit behind the new Workforce Pell legislation in President Trump's One Big Beautiful Bill Act, signed into law on July 4. The legislation extends post-secondary Pell Grant financial eligibility to short-term training programs that currently are not eligible to be paid for using federal aid. While the Beautiful Bill Act passed with a mostly party-line vote, Workforce Pell has long had bipartisan legislative support at the federal level in both the U.S. Senate and House of Representatives. Additionally, this approach has strong support from many quarters, including working-class voters, broadly defined as those without a four-year college degree. A Progressive Policy Institute/YouGov Survey of working-class voters reports that when given five options to choose what would most help them have a good job, career, and get ahead, the number one response of nearly half (46%) was 'affordable, short-term training programs that combine work and learning,' followed by 'more opportunities for apprenticeships with companies' (23%). Only 9% said a four-year college degree, which came in four out of five. As Lisa Larson, CEO of the Education Design Lab, writes in Community College Daily, 'Workforce Pell has finally become law after years of advocacy, stalled negotiations in Congress and a groundswell of support from educators, employers, and learners.' What Is Workforce Pell? The federal Pell Grant Program, originally known as the Basic Educational Opportunity Grant Program, was established by the Higher Education Amendments of 1972. It provides need-based financial aid to undergraduate students who have not yet earned a bachelor's, graduate, or professional degree. The program was renamed in 1980 to honor Rhode Island's long-time Democratic Senator Claiborne Pell, who sponsored the 1972 legislation. To qualify for Pell financial support, students must be enrolled or accepted for enrollment in eligible programs at participating institutions. These programs must lead to a degree or certificate and typically be at least 600 clock hours and 15 weeks in duration. It is currently the largest source of grant aid available to U.S. students. The Congressional Budget Office estimates it will cost nearly $32 billion in fiscal year 2024. Since these grants do not require repayment, they are a crucial tool for expanding access to higher education. Under the new Workforce Pell legislation, the Pell Grant Program will expand to include financial support for short-term, high-quality workforce training programs. These short-term programs typically last less than a year and provide specialized training in fields such as healthcare, information technology, advanced manufacturing, and skilled trades. Participants earn industry-recognized certifications, credentials, and hands-on skills that are highly valued in today's job market. To qualify for Workforce Pell funding, programs must meet several criteria. For example, programs must be between 150 and 599 clock hours and 8 and 15 weeks. Recognized organizations must accredit them. They also must focus on career-specific skills that lead to credentials that improve employability. This approach reflects a growing recognition that non-degree credentials, which were once seen as secondary, are essential for economic success in today's economy. The U.S. Secretary of Education has a significant role in monitoring the program. For example, the Secretary must ensure that an institution has offered the program for at least one year before receiving eligibility; has a verified completion rate of at least 70%, within 150% of the normal time for completion; and meets an earnings requirement that examines program cost, median earnings, and the federal poverty level. What Happens Next? The law takes effect July 1, 2026, with at least three groups responsible for ensuring the program is ready to be implemented. First, the U.S. Department of Education must develop program regulations. The Department has created a negotiated rulemaking committee to do that. This rulemaking approach involves the Department and representatives from the stakeholder groups affected by the new law. This collaborative effort aims to create from the outset a consensus-driven rule process with those involved in implementing the program. Second, state leaders need to prepare for program implementation. For example, Governors, working with their state workforce boards, will need to determine which workforce programs meet the criteria to be eligible for grants. This includes ensuring programs lead to portable, recognized credentials that can be stacked or sequenced as part of a step ladder approach to other recognized credentials, like an associate degree. Finally, universities and other training providers, including employers, also have responsibilities. For example, a significant part of the law's implementation challenge involves ensuring that programs are accessible, especially to low-income participants. Will enough training providers offer eligible courses? Will employers participate in the program by providing the necessary on-the-job training and internships? Why Does This Matter? Workforce Pell is important to students and employers. For students, it makes available crucial financial support for education and training that may otherwise have been inaccessible. For employers, it creates a larger pool of qualified candidates for jobs, many of whom will now have the hands-on experience and credentials that make them ready to contribute immediately. Next, Workforce Pell creates a broader definition of post-secondary education, which is no longer synonymous with a two- or four-year university degree. Instead, post-secondary education and training programs include vocational programs, certifications, and other specialized education options. This policy shift makes lifelong learning a reality. It also reshapes the relationship between education, training, and employment and creates many education and training pathways to success and opportunity. Finally, Workforce Pell enhances economic mobility. By expanding access to high-quality training programs, individuals, especially those from underserved communities, have the opportunity to gain the skills they need for well-paying jobs. This overcomes one of the most persistent barriers to economic advancement and upward mobility: the high cost and inaccessibility of post-secondary education and training. What's Ahead? Workforce Pell is a landmark policy change with the potential to reshape the U.S. landscape of education, training, and workforce development. By broadening the scope of the Pell Grant Program to include short-term training programs, Workforce Pell will offer many Americans the chance to acquire the skills they need to succeed in today's economy. Workforce Pell is not an isolated effort. It fits into a growing movement to provide more pathways to workplace success and upward mobility for individuals who do not follow the traditional college degree route. This includes efforts like apprenticeships, internships, and other work-based learning experiences, as well as industry-recognized credentials. This new law will help these credentials gain acceptance as valuable assets in today's job market. As employers shift toward a more skills-based approach to hiring, policies like Workforce Pell will ensure that all Americans, regardless of their background or educational history, have the opportunity to succeed. It is a critical step forward in expanding the definition of college and redefining what it means to be prepared for the workforce.
